US stocks surge on Fed rate cut hopes, ignoring France, South Korea's political crises

Negative job growth estimations led to positive Fed rate cut expectations and record high US stocks, ignoring political turmoil in France and South Korea

Published on: Dec 5, 2024, 08:36:05 IST

By HT News Desk | Edited by Abhyjith K. Ashokan

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US stocks surged to record highs on Wednesday on hopes of the US monetary policy easing, completely ignoring political upheavals taking place in South Korea and France, news agency AFP reported.

The Dow finished above 45,000 for the very first time. Most of the gains were from larger tech and AI names like Nvidia and Microsoft. (Representational Image/Pixabay)

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As a result, the Dow Jones Industrial Average was up 0.7%, closing at 45,014.04, the S&P 500 was up 0.6%, closing at 6,086.49, and the Nasdaq Composite was up 1.3%, closing at 19,735.12.

The Dow finished above 45,000 for the very first time. Most of the gains were from larger tech and AI names like Nvidia and Microsoft.

This came after payroll firm ADP said US private-sector hiring in November was at a lower-than-expected 146,000 jobs, while a survey from the Institute for Supply Management also showed weaker sentiment than expected in the services sector.

Though it is a negative indicator, it boosted expectations that the Federal Reserve will cut interest rates later this month.

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"The market at this point is looking for excuses to go up, and there's not really anything that might work against that narrative," the report quoted Steve Sosnick of Interactive Brokers as saying.

What happened in France meanwhile?

French lawmakers voted to oust the government of Prime Minister Michel Barnier just three months after he took office, leading to political instability.

Despite this, the French CAC 40 was up 0.7%, closing at 7,303.28. "Over the last couple of days, it's (markets) managed to ignore all sorts of inconvenient things and decided that the situation in France doesn't matter for them," Sosnick said.

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The South Korean story

In South Korea, President Yoon Suk Yeol quickly reversed the decision to impose martial law.

"The situation in Korea doesn't matter," Sosnick added. The South Korean Kospi Index plummeted by 1.4%, closing in at 2,464.00.

However, this was actually less than feared and could have been “much worse,” according to the report which quoted Thomas Mathews, head of Asia-Pacific markets at Capital Economics. Even the South Korean Won rebounded from earlier losses.

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HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

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